A TRUSTED INDEPENDENT HEALTH INSURANCE GUIDE SINCE 1999.
Call our agency partners 866-553-3223
Call our agency partners 866-553-3223
A TRUSTED INDEPENDENT HEALTH INSURANCE GUIDE SINCE 1999.
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full-time equivalent

Infographic regarding full-time equivalent

What is the full-time equivalent?

The full-time equivalent (FTE) calculation is used to determine employer size under the ACA. Any employee working at least 30 hours per week is considered full-time. In addition, part-time employees are counted using the full-time equivalent method of adding the total number of hours worked by all part-time employees in a month, and dividing by 120.

So if a business has 10 employees who each work 80 hours per month, they would have 800 part-time hours. Dividing by 120 gives us 6.66, and the answer is rounded down to get six full-time equivalent employees. Here's a full-time equivalent calculator.

The ACA's employer mandate, which requires large employers to offer affordable, comprehensive health coverage to their full-time employees or face potential penalties, applies to any employer who has at least 50 full-time equivalent employees. This can be a combination of full-time and full-time equivalent employees, with each full-time employee counting as one, and full-time equivalent employees added as described above. If the employer has 50 or more full-time equivalent employees, they must offer affordable coverage that provides minimum value to all of the full-time employees (but not to part-time employees who work fewer than 30 hours per week).

So if an employer has 10 full-time employees and 70 part-time employees, they would be required to offer coverage to the 10 full-time employees if their total workforce under the FTE calculation amounts to at least 50.

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